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           UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                        Washington, DC  20549

                             FORM 10-KSB

X    ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES ACT
     OF 1934

               For the fiscal year ended March 31, 1997


                                
    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934 (NO FEE REQUIRED)


        For the transition period from ________ to _________.

                   Commission file number: 0-26680


                       NICHOLAS FINANCIAL, INC.
            (Name of Small Business Issuer in its Charter)

       British Columbia, Canada                   8736-3354
   (State or Other Jurisdiction of             (I.R.S. Employer
    Incorporation or Organization            Identification No.)

 2454 McMullen Booth Road, Building C
        Clearwater, Florida                         34619
(Address of Principal Executive Offices)          (Zip Code)

    Issuer's Telephone Number, Including Area Code: (813) 726-0763

    Securities registered under Section 12(b) of the Exchange Act:

                                                 Name of Each Exchange
     Title of Each Class                          on Which Registered
  __________________________                     _____________________
  __________________________                     _____________________

Securities registered under Section 12(g) of the Exchange Act:

                      COMMON STOCK, No par value
                           (Title of Class)

Check  whether the issuer: (1) filed all reports required to   be
filed by Section 13 or 15(d) of the Exchange Act during the  past
12  months  (or  for such shorter period that the registrant  was
required to file such reports), and (2) has been subject to  such
filing requirements for the past 90 days.

Yes     X      No

This  Form  10-KSB consists of 38 pages. Exhibits are indexed  at
page 21.
____________________________________________________________________________

<PAGE> 1

Check  if  disclosure of delinquent filers pursuant  to  Item  405  of
regulation  S-B is not contained in this form, and no disclosure  will
be contained, to the best of the registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part  III
of this Form 10-KSB or any amendment to this Form 10-KSB.  [   ]

The issuer's revenues for its most recent fiscal year were $6,209,129

As  of  March  31,  1997, 6,990,544 shares of the Registrant's  common
stock  were outstanding, and the aggregate market value of the  shares
held by non-affiliates was approximately $6,365,045

DOCUMENTS INCORPORATED BY REFERENCE: NONE

Transitional Small Business Disclosure Format (check one):Yes[ ]  No  [ X ]


Forward-Looking Information

       This  10-K  contains  various  forward-looking  statements  and
information that are based on management's beliefs and assumptions, as
well  as information currently available to management.  When used  in
this  document,  the  words  "anticipate," "estimate,"  "expect,"  and
similar   expressions   are   intended  to  identify   forward-looking
statements.   Although  the  Company believes  that  the  expectations
reflected  in such forward-looking statements are reasonable,  it  can
give  no  assurance that such expectations will prove to  be  correct.
Such  statements  are  subject  to certain  risks,  uncertainties  and
assumptions.   Should  one  or more of these  risks  or  uncertainties
materialize, or should underlying assumptions prove incorrect,  actual
results  may  vary  materially from those  anticipated,  estimated  or
expected.  Among the key factors that may have a direct bearing on the
Company's  operating  results are fluctuations  in  the  economy,  the
degree and nature of competition, demand for consumer financing in the
markets  served by the Company, the Company's products  and  services,
increases  in  the  default rates experienced  on  Contracts,  adverse
regulatory  changes in the Company's existing and future markets,  the
Company's  ability to expand its business, including  its  ability  to
complete   acquisitions  and  integrate  the  operations  of  acquired
businesses, to recruit and retain qualified employees, to expand  into
new  markets  and to maintain profit margins in the face of  increased
pricing competition

                               PART I

Item 1.     Business

General

      Nicholas  Financial,  Inc. ("Nicholas  Financial-Canada")  is  a
Canadian  holding  company  incorporated under  the  laws  of  British
Columbia.   The  business activities of Nicholas Financial-Canada  are
conducted through its wholly-owned subsidiaries formed pursuant to the
laws  of  the  State of Florida, Nicholas Financial,  Inc.  ("Nicholas
Financial")  and  Nicholas  Data Services,  Inc.,  ("NDS").   Nicholas
Financial  is a specialized consumer finance company engaged primarily
in  acquiring  and  servicing installment contracts ("Contracts")  for
purchases  of  used automobiles and light trucks. To a lesser  extent,
the  Company  also  makes direct consumer loans  and  sells  consumer-
finance  related products ("Insurance Products").  NDS is  engaged  in
designing,  developing,  marketing and support  of  industry  specific
computer  application software for small businesses located  primarily
in  the  Southeast  United  States.   Nicholas  Financial's  financing
activities accounted for approximately 92.6% of consolidated  revenues
for  the  fiscal  year  ended  March 31,  1997  and  NDS's  activities
accounted for approximately 7.4% of such revenues.

       Nicholas  Financial-Canada,  Nicholas  Financial  and  NDS  are
hereafter collectively referred to as the "Company".  Unless otherwise
specified,  all financial information herein is designated  in  United
States currency.

      The  Company's principal executive offices are located  at  2454
McMullen  Booth  Road, Building C, Clearwater Florida 34619,  and  its
telephone number is (813) 726-0763.

<PAGE> 2

Automobile Finance Business

      The  Company  is engaged in the business of providing  financing
programs,  primarily on behalf of purchasers of used  cars  and  light
trucks  who meet the Company's credit standards, but who do  not  meet
the  credit standards of traditional lenders, such as banks and credit
unions,  because  of  the  age  of the  vehicle  being  financed,  the
customer's  job  instability  or credit history.   Unlike  traditional
lenders  who  look primarily to the credit history of the borrower  in
making  lending  decisions and typically finance new automobiles,  the
Company  is  willing  to  purchase  installment  sales  contracts  for
purchases made by borrowers who do not have a good credit history  and
for  older  model  and high mileage automobiles.  In making  decisions
regarding the purchase of a particular installment sales contract  the
Company  considers  the  following factors related  to  the  borrower,
current  and prior job status, history in making installment  payments
for   automobiles,  current  income,  general  credit  history,  prior
experience  with Contracts purchased from the dealer  from  which  the
Company is purchasing the Contract, and the value of the automobile in
relation to the purchase price of the installment sales contract.

     The Company's automobile finance programs are currently conducted
in  Florida  and Georgia only under the name Nicholas Financial,  Inc.
The  Company currently operates ten branch offices in Florida and  two
branch offices in Georgia.  As of March 31, 1997 the Company had  non-
exclusive agreements with approximately 500 dealers  for the  purchase
of  retail installment sales contracts (the "Contracts") that meet the
Company's  financing  criteria.   The dealer  agreements  require  the
dealer  to  originate  Contracts  in  accordance  with  the  Company's
guidelines.

      From July 1990 through March 31, 1997, the Company had purchased
over  11,174  Contracts with an initial principal  amount  aggregating
approximately  $72,354,454.  The average initial principal  amount  of
Contracts purchased by the Company was approximately $6,475,  and  had
an average initial term of 32 months.  The Contracts were purchased by
the  Company  from  automobile  dealers  at  an  average  discount  of
approximately 12% from their initial principal amount.

     The obligors under the Contracts typically make down payments, in
the form of cash or trade-in, ranging from 5% to 20% of the sale price
of  the  vehicle financed.  The balance of the purchase price  of  the
vehicle  plus  taxes,  title  fees and, if  applicable,  premiums  for
accident  and  health  insurance  and/or  credit  life  insurance,  is
generally  financed  over a period of 12 to 60 months.   Accident  and
health  insurance  coverage  enables the  borrower  to  make  required
payments  under the Contract in the event the borrower becomes  unable
to  work because of illness or accident and credit life insurance pays
the borrower's obligations under the Contract upon his or her death.

      The  annual  percentage  rate ("APR")  is  the  actual  cost  of
borrowing money, expressed in form of the annual interest rate payable
by the borrower.  The APR for Contracts purchased by the Company range
from  18%  to 30%.  As of March 31, 1997, the average APR on Contracts
purchased  and  currently outstanding is 24% and the average  discount
from the initial principal amount is 10%.

      The Company purchases Contracts from the automobile dealer at  a
negotiated price that is less than the original principal amount being
financed  by  the  purchaser of the automobile.   The  amount  of  the
discount  depends  upon  factors such as the  age  and  value  of  the
automobile,  the  credit worthiness of the purchaser  and  competitive
conditions in the industry.  Historically, the Contracts purchased  by
the Company have been purchased at discounts that range from 5% to 30%
of  the original principal amount of the Contract.  In addition to the
discount, the Company charges the dealer a processing fee of  $75  per
Contract  purchased.   Because  of  competitive  conditions   in   the
industry, all Contracts purchased by the Company since April  1,  1992
have  been purchased from dealers without recourse against the dealer,
meaning that the Company, not the dealer, bears the risk of nonpayment
by  the  borrower under the Contract.  Prior to then,  some  Contracts
were acquired with full recourse against the dealer for nonpayment  by
the  borrower.   As  of  March  31, 1997,  substantially  all  of  the
Company's  loan  portfolio consisted of Contracts that were  purchased
without  recourse against the dealer.  Although substantially all  the
Contracts  in  the  Company's  loan portfolio  were  acquired  without
recourse,  the  dealer remains liable to the Company  for  liabilities
arising from certain representations and warranties made by the dealer
with respect to compliance with applicable federal and state laws  and
valid title to the vehicle.

      The Company purchases a Contract only after the Company and  the
automobile  dealer arrive at a negotiated price for the  Contract  and
the  dealer has provided the Company with the requisite proof that the
vehicle  is  properly titled, that the Company has a  perfected  first
priority  lien on the financed vehicle, that the customer has obtained
the  required  collision  insurance naming  the Company as loss payee, 
that  the  installment  salescontract  has  been  fully and accurately 
completed and  validly  executed. Once  the  Company  has received and 
approved all required documents, it pays the  dealer for the  Contract
and commences servicing the Contract through maturity.

<PAGE> 3

      The  Company  requires the owner of the vehicle  to  obtain  and
maintain  collision insurance, naming the Company as a loss payee,  in
an amount not less than the value of the vehicle, with a deductible of
not  more  than $500.  The Company does not offer collision insurance.
The  Company  offers  purchasers of vehicles certain  other  insurance
products.  These products are offered on behalf of the Company by  the
automobile  dealer, typically at the time of sale, and  consist  of  a
roadside assistance plan, mechanical breakdown protection plan, credit
life  insurance,  credit  accident and  health  insurance  and  credit
property  insurance. If the purchaser so desires, the  cost  of  these
products  may  be included in the amount financed under the  Contract.
As of March 31, 1997, less than 4% of the borrowers under Contracts in
the  Company's  loan  portfolio  had  elected  to  purchase  insurance
products offered by the Company.

Direct Consumer Loans

      Although  the Company is licensed to make small direct  consumer
loans up to $25,000, the average loan made to date by the Company  had
an  initial  principal balance of $2,327. The Company does not  expect
the average loan size to increase significantly within the foreseeable
future and does not presently intend to make loans at the maximum size
permitted  under its license.  The Company offers loans  primarily  to
borrowers under the Contracts previously purchased by the Company.  In
deciding  whether  or  not to make a loan the  Company  considers  the
individual's credit history, job stability and income and  impressions
created  during  a  personal interview with a  Company  loan  officer.
Additionally,  because approximately 90% of the direct consumer  loans
made  to  date have been made to borrowers under Contracts  previously
purchased  by  the Company, the payment history of the borrower  under
the Contract is a significant factor in making the loan decision.  The
direct consumer loan program was implemented in April 1995 and is  not
currently  a  significant source of revenue for the  Company.   As  of
March  31,  1997  loans  made by the Company pursuant  to  its  direct
consumer  loan  program constituted approximately 2% of the  aggregate
principal  amount of the Company's loan portfolio.  As  of  March  31,
1997,  the  average APR for direct consumer loans made by the  Company
was 24%, with the range being from 20% to 30%.

      In  connection with its direct consumer loan program the Company
also  offers  health and accident insurance coverage and  credit  life
insurance  to borrowers.  Borrowers in approximately 80%  of  the  432
loan  transactions  currently outstanding  as of March  31,  1997  had
elected  to  purchase insurance coverage offered by the Company.   The
cost  of  this  insurance is included in the amount  financed  by  the
borrower.

      As  of  March  31,  1997, approximately  98%  of  the  aggregate
outstanding principal balance of loans in the Company's loan portfolio
was  comprised of Contracts purchased from automobile dealers  and  2%
consisted of loans made pursuant to the Company's direct loan program.
The Company currently typically purchases between 200 and 400 indirect
contracts each month and originates between 50 and 100 direct consumer
loans each month. The Company currently operates ten branch offices in
Florida and two branch offices in Georgia.

Financing Sources

     The  Company  finances  the  acquisition  of  Contracts  with its  
retained  earnings,   cash  flow  from  the  operations,   loans  from
investors,  insiders and a line of credit with a lending  institution.
In  May of 1996 the Company expanded its line of credit to $25 million
and  is  currently negotiating  another increase in the  size  of  the
line,  an extended maturity date, and other various components of  its
contract with BA Business Credit.

     As of March 31, 1997, The Company owed approximately $1.8 million
to 11 investors who purchased notes issued by the Company. These notes
bear  interest  at  rates  from 10.5 % to  12%.  In  most  cases,  the
Company's  obligation to repay the note is subordinated to payment  of
its payment obligations under the BA Business Credit line of credit.

     The BA Business Credit line  of  credit  is  secured  by  finance
receivables  and  other  assets of the  Company.   The  interest  rate
payable  by the Company on funds drawn down under the line  of  credit
decreases  as  the  amount drawn down increases.  For  the  first  $10
million drawn down the interest rate is 1.75% over the base prime rate
as  announced  and published from time to time by BankAmerica.   After
the  amount drawn down exceeds $10 million, the interest rate  on  the
entire  amount decreases to 1.25% over the base prime rate  until  the
amount  drawn  down  exceeds $15 million, when the rate  decreases  to
1.00% over such base prime rate.  In addition to interest, the Company
also  pays  a monthly fee to BA Business Credit equal to .25%  of  the
amount  available  under the line of credit that has  not  been  drawn
down.   As of March 31, 1997, the Company had drawn down approximately
$17.7  million under the line of credit.  As of that date the interest
rate  payable by the Company under the line of credit was  9.5%.   The
revolving line expires in May 1998.

<PAGE> 4

Underwriting Guidelines

      The  Company's typical customer is 30 years old, has  a  monthly
gross  income of $1,500 and a credit history that fails  to  meet  the
lending  standards  of  banks and credit  unions.   Among  the  credit
problems  experienced by the Company's customers that  resulted  in  a
poor  credit  history are: unpaid revolving credit  card  obligations;
unpaid  medical  bills;  unpaid student loans; prior  bankruptcy;  and
evictions  for  nonpayment  of rent.  The Company  believes  that  its
customer profile is similar to that of its direct competitors.

      Prior to its approval of the purchase of a Contract, the Company
is provided with a standardized credit application  completed  by  the 
consumer  which  contains  information  relating  to  the   consumer's
background, employment, and credit history. The Company also obtains a
credit  report from an independent reporting service and verifies  the
consumer's  employment  and residence. In  most  cases  consumers  are
interviewed by telephone by a Company application processor.

      The   Company  utilizes  internally  prepared  buying guidelines 
that branch managers purchase Contracts under. Any  contract that does 
not meet these guidelines must be  approved  by the management of  the
Company.  The  Company  currently  has  two  regional  managers  whose
responsibility  it  is to manage the specific branches  in  a  defined
geographic  area.  Regional mangers are responsible to  monitor  their
branches  in  respect  to Contracts that are being  purchased  by  the
Company.

      The  Company  continues  to  utilize  the   Special   Operations 
Department,  ("SOD")  to perform on-site audits of  branch  compliance
with  Company buying guidelines. SOD will audit Company branches on  a
schedule that is variable depending on the size of the branch,  length
of  time  a   branch has been open, current tenure of branch  manager,
previous   branch   audit  score,  historical   and   current   branch
profitability,  and other intangible factors. SOD  is  an  independent
department   that   reports  to  the  Accounting  and   Administrative
Management  of  the Company. The Company believes that an  independent
review and audit of its branches that is not tied to the sales arm  of
the  Company  is  imperative  as it results  in  information  that  is
impartial.

      The Company uses essentially the same criteria in analyzing  the
purchase of a Contract as it does in analyzing a direct consumer loan.
Lending decisions regarding direct consumer loans are made based  upon
a  review  of  the  customer's loan application, credit  history,  job
stability,  income, in-person interviews with a Company  loan  officer
and  the value of the collateral offered by the borrower to secure the
loan.   To date, since approximately 90% of the Company's direct loans
have been made to individuals whose automobiles have been financed  by
the  Company,  the  customer's payment history  under  the  automobile
installment  sale  agreement is a significant factor  in  the  lending
decision.   The  decision  process with respect  to  the  purchase  of
Contracts  is  similar, however, the customer's prior payment  history
with  automobile loans is weighted more heavily in the decision making
process  and the collateral value of the automobile being financed  is
taken into account.

      After reviewing the information included in the loan application
and  taking  the  other factors into account, Company  representatives
categorize  the  borrower using traditional credit classifications  of
"A",  indicating high credit-worthiness, through "D", indicating lower
credit-worthiness.

      In  the  absence  of other factors, such as a favorable  payment
history on a Contract held by the Company, the Company generally makes
direct  consumer loans only to individuals rated in categories "B"  or
higher.   Contracts are financed for individuals who fall  within  all
four  acceptable rating categories utilized, "A" through "D".  Usually
borrowers who fall within the two highest categories are purchasing  a
two  to  four year old, low mileage used automobile from the inventory
of  a new car dealer, while borrowers in the two lowest categories are
purchasing an older, high mileage automobile from an independent  used
automobile  dealer.   Approximately 5% of the loans  financed  by  the
Company  are with customers rated in the "A" category, 10%  are  rated
"B", 65% are rated "C" and 20% are rated "D".

      Upon  credit approval and the receipt of all required title  and
insurance documentation, the Company pays the dealer for the Contract.
The  Company  typically  purchases  the  Contract  for  a  price  that
approximates  the  wholesale value of the automobile  being  financed.
The  amount  the Company is willing to pay a dealer for  a  particular
Contract depends upon the credit rating of the customer.  The  Company
will  pay more (e.g. purchase the Contract at a smaller discount  from
the original principal amount) for Contracts as the credit risk of the
customer improves. The discounts from the initial principal amount  of
Contracts  purchased  by  the Company  range  from  5%  to  30%.   The
Company's  current  established guidelines for discounts  are  5%  for
borrowers  rated in the "A" category, 7.5% for those in the  "B",  10%
for  those in the "C" categories and 15% or more for those in the  "D"
category.  Purchases of Contracts at discounts that do not fall within
the  guidelines  require the prior approval of  the  Company's  senior
management.   Approximately  25%  of  the  Contracts  that  have  been
purchased  by the Company were purchased with discounts  that  do  not
fall within the guidelines.

<PAGE> 5

Servicing and Monitoring of Contracts

      The  Company  requires  all customers  to  obtain  and  maintain
collision  insurance  covering damage  to  the  vehicle.   Failure  to
maintain  insurance constitutes a default under the Contract  and  the
Company  may  at  its  discretion, repossess the vehicle.   To  reduce
potential  loss due to insurance lapse, the Company has the legal  and
contractual  right  to  force  place  its  own  collateral  protection
insurance policy which covers loss due to physical damage to  vehicles
not covered by collision insurance.

      The Company's Management Information Services personnel maintain
a  number  of  reports to monitor compliance by borrowers  with  their
obligations  under  Contracts and direct loans made  by  the  Company.
These  reports  may  be accessed on a real-time  basis  by  management
personnel,  including  branch office managers, at  computer  terminals
located  in  the  main  office and each branch  office.   The  reports
include:  delinquency aging reports, insurance due  reports,  customer
promises  reports,  vehicle  information  reports,  purchase  reports,
dealer   analysis  reports,  static  pool  reports,  and  repossession
reports.

      The  delinquency report is an aging report that  provides  basic
information regarding each account and reports accounts that are  past
due.   The  report  includes information such as the  account  number,
address  of the borrower, home and work phone numbers of the borrower,
original   term  of  the  Contract,  number  of  remaining   payments,
outstanding balance, due dates, date of last payment, number  of  days
past due, scheduled payment amount, amount of last payment, total past
due, and special payment arrangements or agreements.

     Accounts that are less than 120 days matured are reported one day
past due after their due date.  After an account has matured more than
120 days, it does not show up on the delinquency report until it is 11
days  past  due,  at  which time a late charge is assessed.   Once  an
account  become  30  days  past  due,  repossession  proceedings   are
implemented  unless  the  borrower  provides  the  Company   with   an
acceptable  explanation for the delinquency and displays a willingness
and  ability to make the payment, and there is an agreed upon plan  to
return the account to current status.  When an account is 60 days past
due,  the Company ceases amortization of the Contract and repossession
proceedings are initiated.  At 120 days delinquent, if the vehicle has
not  yet been repossessed, the account is written off.  Once a vehicle
has  been repossessed, it no longer appears on the delinquency report.
It  then  appears on the Company's repossession report  and  is  sold,
either at auction or to an automobile dealer.

      When  an  account  becomes delinquent, the  Company  immediately
contacts the borrower to determine the reason for the delinquency  and
to  determine if arrangements for payment can appropriately  be  made.
Once  payment arrangements acceptable to the Company have  been  made,
the  information  is  entered in its data  base  and  generated  on  a
"Promises  Report"  which  is utilized by  the  collection  staff  for
account follow up.

      The  Company  also  generates  an insurance  report  to  monitor
compliance  with  the  insurance obligations imposed  upon  borrowers.
This  report  includes the account number, name  and  address  of  the
borrower, information regarding the insurance carrier, summarizes  the
insurance coverage, identifies the expiration date of the policy,  and
basic  information regarding payment dates and term of  the  Contract.
This report helps the Company in identifying borrowers whose insurance
policy  is  up  for  renewal or in jeopardy of  being  canceled.   The
Company  sends  written  notices to, and makes  direct  contact  with,
borrowers  whose insurance policies are about to lapse or be canceled.
If  the borrower fails to provide proof of coverage within 30 days  of
notice, the Company has the option of purchasing insurance and  adding
the  cost  and  applicable  finance charges  to  the  balance  of  the
Contract.

       The  Company  prepares  a  repossession  report  that  provides
information  regarding repossessed vehicles and aids  the  Company  in
disposing   of  repossessed  vehicles.   In  addition  to  information
regarding the borrower, this report provides information regarding the
date of repossession, date the vehicle was sold, number of days it was
held  in  inventory  prior to sale, year and make  and  model  of  the
vehicle,  mileage,  payoff amount on the Contract,  NADA  book  value,
black  book  value,  suggested sale price, location  of  the  vehicle,
original  dealer, and notes other information that may be  helpful  to
the Company such as the condition of the vehicle.

      The Company also prepares a dealer analysis report that provides
information  regarding each dealer from which it purchases  Contracts.
This  report allows the Company to analyze the volume of business done
with  each  dealer and the terms on which it purchased Contracts  from
the dealer.

<PAGE> 6

      The Company's policy is to aggressively pursue legal remedies to
collect  deficiencies from customers. Delinquency notices are sent  to
customers and verbal requests for payment are made beginning  when  an
account  becomes 11 days delinquent.  When an account becomes 30  days
delinquent   and  the  borrower  has  not  made  payment  arrangements
acceptable to the Company or has failed to respond to the requests for
payment,  a  repossession request form is prepared by the  responsible
branch  office  employee for approval by the branch  manager  for  the
vicinity  in which the borrower lives.  Once the repossession  request
has  been approved by the branch manager, the repossessor delivers the
vehicle  to an automobile dealer specified by the Company which  holds
it  for the Company.  The Company maintains relationships with several
repossession firms which repossess vehicles for a fee that ranges from
$100 to $300 for each vehicle repossessed.  As required by Florida and
Georgia  law,  the customer is notified by certified letter  that  the
vehicle  has been repossessed and that to retain the vehicle  he  must
make  arrangements satisfactory to the Company and pay the amount owed
under the Contract within ten days after delivery of the letter.   The
minimum  requirement for return of the vehicle is payment of all  past
due  amounts  under  the  Contract and all  expenses  of  repossession
incurred  by the Company.  If satisfactory arrangements for return  of
the vehicle are not made within the statutory period, the Company then
sends  title  to  the  vehicle to the state title transfer  department
which  then  registers the vehicle in the name of  the  Company.   The
Company  then  either  sells  the  vehicle  to  a  dealer  or  has  it
transported   to  an  automobile  auction  for  sale.    On   average,
approximately  30  days  lapse between  the  time  the  Company  takes
possession  of  a vehicle and the time it is sold by a  dealer  or  at
auction.   During  its  most recent fiscal year, repossessed  vehicles
have  been sold at prices that average approximately $1,000 to  $1,500
less  than the price paid by the Company for the Contract.   When  the
Company determines that there is a reasonable likelihood of recovering
part or all of any deficiency against the borrower under the Contract,
it  pursues  legal  remedies  available to  it  including  law  suits,
judgement liens and wage garnishments.  Historically, the Company  has
recovered approximately 15% of deficiencies from such borrowers.


Marketing and Advertising


       The  Company's  Contract  marketing  efforts  are  directed  at
automobile  dealers. The Company attempts to meet  dealers'  needs  by
offering   highly-responsive,  cost-competitive  and  service-oriented
financing  programs.  The Company relies on  its  branch  managers  to
solicit  agreements  for  the purchase of  Contracts  with  automobile
dealers  located within a radius of 25 miles of the branch  office  as
its sole marketing activity.  The branch manager provides dealers with
information regarding the Company and the general terms upon which the
Company  is willing to purchase Contracts.  The Company presently  has
no  plans to implement any other forms of advertising for the purchase
of Contracts such as radio or newspaper advertisements.

      Currently,  the  primary  method  utilized  by  the  Company  in
soliciting borrowers under its direct consumer loan program is  direct
mailings to individuals who have a good credit history under Contracts
purchased  by  the  Company.   The  Company  intends  to  expand   its
solicitation  of  such  loans when management believes  its  staff  is
adequately  trained  to  evaluate credit risks  associated  with  such
loans.


The Industry

      The non-prime automobile finance market is highly fragmented and
historically  has  been serviced by a variety of  financial  entities,
including   captive   finance   subsidiaries   of   major   automobile
manufactures,  banks, independent finance companies,  and  small  loan
companies.  Many  of  these  financial entities  do  not  consistently
provide financing to this market. Although prime  borrowers  represent  
the largest segment of the automobile financing market, there are many 
potential purchasers  of automobiles  who  do  not  qualify  as  prime
borrowers. Purchasers  considered  by  the  Company  to  be  non-prime 
borrowers  are  generally unable to  obtain  credit  from  traditional  
sources  of  automobile financing. The Company believes that,  because
these potential purchasers represent a substantial market, there is  a
demand by automobile  dealers  with respect to financing for non-prime
borrowers  that  has  not  been  effectively  served   by  traditional
automobile financing sources. According to the Federal Reserve  Board,
as of December 31, 1996, there was approximately  $377.3  billion   in
automobile  related  installment credit outstanding.  The  Company  is
unaware  of  any authoritative estimates of the non-prime  portion  of
this market.

      In the past year the Company has seen several of its competitors
report  unexpected  losses  due  to, but  not  limited  to, inadequate
Reserves  and  accounting  irregularities.  The  Company believes  the
circumstances causing the  industry   turmoil  are  the result of poor
reserve analysis, overall lack of responsible financial management and
insufficient  internal  controls.  The  Company is confident  that its
static   pool  reserve  analysis,   excellent  internal  controls  and
experienced management team will continue its history  of accurate and 
reliable financial reporting.

<PAGE> 7

Computerized Information System

      The  Company's  operations utilize integrated  computer  systems
developed  by  NDS  to  enhance its ability  to  respond  to  customer
inquiries, to monitor the performance of its investment portfolio  and
the   performance  of  individual  borrowers  under  Contracts.    All
personnel   are   provided  with  instant,  simultaneous   access   to
information  from a single shared database.  The Company  has  created
specialized programs to automate the tracking of loans from the  point
of inception.  The capacity of the networking system has been expanded
to  include the Company's branch office locations.  See the discussion
under  Servicing  and Monitoring of Contracts for  a  summary  of  the
different reports prepared by the Company.


Strategy

      The Company's business strategy is to continue its growth and to
increase its profitability through greater penetration in its  current
markets,   controlled  geographic  expansion  into  new  markets   and
selective  portfolio acquisitions. As of the date of this report,  the
Company has no commitments or agreements in principle with respect  to
any  portfolio acquisitions. The Company also intends to continue  its
expansion  through  the  increased origination  of  additional  direct
consumer  loans.  The  Company believes that  opportunity  for  growth
continues to exist in the State of Florida as well as Georgia and  for
the foreseeable future intends to concentrate its expansion activities
there.


Competition

       The   consumer  finance  industry  is  fragmented  and   highly
competitive.   There  are  numerous financial service  companies  that
provide consumer credit in the markets served by the Company including
banks, other consumer finance companies, and captive finance companies
owned  by  automobile  manufacturers and  retailers.   Many  of  these
companies  have significantly greater resources than the Company.  The
Company  does not believe that increased competition for the  purchase
of  Contracts will cause a reduction in the interest rate  payable  by
the  purchaser of the automobile.  However, increased competition  for
the  purchase of Contracts will enable automobile dealers to shop  for
the  best price, thereby causing a reduction in the discount from  the
initial principal amount at which the Company will be able to purchase
Contracts.

     The Company's target market consists of persons who are generally
unable  to  obtain  traditional used car financing  because  of  their
credit  history, the vehicle's mileage or age.  The Company  has  been
able to expand its automobile finance business in the non-prime credit
market by offering to purchase Contracts on terms that are competitive
with those of other companies which purchase automobile receivables in
that  market segment.  Because of the daily contact that many  of  its
employees  have with automobile dealers located throughout the  market
areas  served by it, the Company is generally aware of the terms  upon
which  its  competitors  are  offering  to  purchase  Contracts.   The
Company's  policy  is  to  modify its terms  if  necessary  to  remain
competitive. However, the Company will not sacrifice credit quality or
prudent business practices in order to maintain annual growth that  is
expected from finance companies typical in size to the Company  .  The
Company  continues  to  analyze  new lending  programs  and  marketing
methods which may be implemented with the objective of increasing  its
market  share,  including  the possibility  of  offering  to  purchase
portfolios  of  seasoned Contracts from dealers in  bulk  transactions
from $50,000 to $5,000,000.

     The Company's ability to compete effectively with other companies
offering similar financing arrangements depends upon maintaining close
business relationships with dealers of used motor vehicles.  No single
dealer  out  of  the approximately 500 dealers that  the  Company  has
contractual  relationships with accounted for over 5% of its  business
volume in the past year.


Regulation

      The Company's financing and insurance operations are subject  to
regulation, supervision and licensing under various federal, state and
local statutes and ordinances.  Additionally, the procedures that must
be  followed  by  the Company in connection with the  repossession  of
vehicles securing Contracts are regulated by the State of Florida  and
the  State  of Georgia.  To date, the Company's operations  have  been
conducted   exclusively  in  the  States  of  Florida   and   Georgia,
accordingly, the laws of the State of Florida and Georgia as  well  as
applicable  federal laws, govern the Company's operations.  Compliance
with  existing laws and regulations applicable to the Company has  not
had  a material adverse effect on the Company's operations. Management
believes that it maintains all requisite licenses and permits  and  is
in substantial compliance with all applicable local, state and federal
regulations.

<PAGE> 8

     The Company has been issued a Retail Installment Seller's License
and  a  Sales  Finance  Company License by the Florida  Department  of
Banking  and  Finance  and the Georgia Secretary  of  State  (Business
Services  &  Regulation).  Pursuant to regulations  of  the  State  of
Florida  governing  the Company's financing business  activities,  the
Department  of Banking and Finance conducts a review of the  Company's
activities,  at  least  annually,  to  monitor  compliance  with   the
applicable regulations.  The regulations govern, among other  matters,
licensure   requirements,  requirements  for  maintenance  of   proper
records,  payment  of required fees to the State of  Florida  and  the
State  of Georgia, maximum interest rates that may be charged on loans
to finance used vehicles, and proper disclosure to customers regarding
financing terms.


Employees

      The Company's executive management and various support functions
are centralized at the Company's corporate headquarters in Clearwater,
Florida.   As  of March 31, 1997 the Company employed a  total  of  52
persons, five of whom work for NDS and 47 of whom work in the  finance
activities.  The Company provides health and life insurance, long-term
disability insurance, dental insurance, employee stock options  and  a
401(k)  plan  for  all  employees.  No  employees  are  covered  by  a
collective bargaining agreement and the Company believes it  has  good
relations with its employees.


Item 2. Properties

      The  Company rents its home office and branch office facilities.
Its  home office, located at 2454 McMullen Booth Road, Building  C  in
Clearwater, Florida, consists of approximately 4,500 square feet.  The
Company occupies the space pursuant to a lease that commenced on  July
1,  1995  and  expires on June 30, 1999. The current monthly  rate  is
$4,251,   with  annual  increases  of  approximately  2.25%  in   each
subsequent  year  of  the lease.  In the opinion  of  management,  the
current home office space is adequate to meet the needs of the Company
for the foreseeable future.

      The  Company's branch offices all consist of approximately 1,000
square feet and are located in shopping centers or strip malls.  These
offices  are occupied pursuant to leases with an initial term of  from
one  to  three years at annual rates ranging from $6 to $11 per square
foot.

Item 3. Legal Proceedings

      The  Company  is  not  a  party to any  material  pending  legal
proceedings other than ordinary routine litigation incidental  to  its
business  none  of which, in the opinion of management,  will  have  a
material  effect  on the Company's financial position  or  results  of
operations.


Item 4. Submission of Matters to a Vote of Security Holders

     None

<PAGE> 9

                               PART II



Item 5. Market for Common Equity and Related Stockholder Matters

      The  Company's common stock has been listed for trading  on  the
Vancouver  Stock Exchange since 1987 under the symbol "NFC.U".  It  is
also  traded on the OTC Bulletin Board under the symbol "NCFNF"  since
1996.

      Holders of Common Stock are entitled to receive dividends if and
when declared by the Board of Directors out of funds legally available
therefor.   It  has  been the Company's policy to retain  earnings  to
finance the growth of its business.  Accordingly, the Company has  not
issued a cash dividend and has no plans to do so in the near future.

     As of March 31, 1997 the Company had not issued, and had no plans
to  issue, any shares of its Preferred Stock.  The Preferred Stock may
be  issued  in  series  with  each series having  such  rights  as  to
dividends  and  liquidation as determined by the  Company's  Board  of
Directors.


The following table reflects the high and low prices for the Company's
common stock during the periods indicated as reported on the Vancouver
Stock Exchange.

<TABLE>
<CAPTION>

Price Range of Common Stock*
                                       High          Low
<S>                                 <C>    <C>   <C>    <C>
                                       
Year ended March 31, 1997           Cdn     U.S.  Cdn    U.S.
     First Quarter ...........      $3.55   $2.59 $2.37  $1.73
     Second Quarter...........      $4.04   $2.95 $3.01  $2.20
     Third Quarter............      $3.29   $2.40 $1.71  $1.25
     Fourth Quarter...........      $2.85   $2.05 $1.81  $1.30

                                       High          Low
Year ended March 31, 1996           Cdn     U.S.  Cdn    U.S.
     First Quarter ...........      $2.25   $1.65 $2.06  $1.50
     Second Quarter...........      $3.36   $2.50 $2.69  $2.00
     Third Quarter............      $3.55   $2.60 $2.93  $2.15
     Fourth Quarter...........      $3.30   $2.42 $2.39  $1.75

</TABLE>

  1     As reported on the Vancouver Stock Exchange.  These prices have
    been converted from Canadian to U.S. Dollars at an exchange rate in
    effect  on the date that the price disclosed was reported  on  the
    Vancouver Stock Exchange.  Presently the U.S. market dominates the
    trading activity in the Company's shares.
  
  2    As of March 31, 1997 there were approximately 500 stockholders of
    record of the Company's Common Stock.

<PAGE> 10

Item  6.  Management's Discussion and Analysis of Financial  Condition
and Results of Operations

Overview

   Consolidated net income increased in fiscal year ending  March  31,
1997  to $792,254 or $0.12 per share from $662,151 or $0.11 per  share
in  fiscal  year ending March 31, 1996.  Earnings for  the  year  were
favorably  impacted by a significant increase in the outstanding  loan
portfolio  coupled with a marginal improvement in the cost  of  funds.
The  Company's  NDS  subsidiary did not  contribute  significantly  to
consolidated operations in fiscal 1997 or 1996.


The following table sets forth certain financial data:

<TABLE> 
<CAPTION>

Years Ended March 31                     1997              1996

<S>                                  <C>              <C>  
 Average Net Finance Receivables (1)  $24,932,075      $20,004,986

 Average Indebtedness (2)              16,566,604       14,185,584

 Interest Income                        5,749,410        5,267,530

 Interest Expense                       1,656,402        1,517,181

 Net Interest Income                    4,093,008        3,750,349

____________________________________________________________________
 Gross Portfolio Yield (3)                 23.06%           26.33%

 Average Cost of Borrowed Funds (2)        10.00%           10.70%

 Net Interest Spread (4)                   13.06%           15.63%

 Net Portfolio Yield (3)                   16.42%           18.75%


</TABLE>

(1)Average  net  finance  receivables represent  the  average  of  net
  finance  receivables  throughout the year.  Net finance  receivables
  represents  gross  finance  receivables less  any  unearned  finance
  charges related to those receivables.

(2)Average  Indebtedness represents the average outstanding borrowings
  under  its  senior credit line with BA Business Credit, subordinated
  debt  and  notes payable.  Average cost of borrowed funds represents
  interest expense as percentage of average indebtedness.

(3)Gross portfolio yield represents total revenues as a percentage  of
  average  finance  receivables.  Net portfolio yield  represents  net
  interest income as a percentage of average finance receivables.

(4)Net interest spread  represents  the gross portfolio yield less the
  average cost of borrowed funds.

<PAGE> 11

Fiscal 1997 compared to Fiscal 1996


Interest Income and Loan Portfolio

     Interest  revenue, predominantly finance charge income, increased
9%  to  $5.7 million in fiscal 1997 from $5.3 million in fiscal  1996.
The  net finance receivable balance totaled $25.9 million at March 31,
1997,  an  increase of 41% from the $18.3 million at March  31,  1996.
The  gross finance receivable balance increased  39% to $38.7  million
at  March  31, 1997 from $27.8 million at March 31, 1996. The  primary
reason  interest revenue increased was the increase in the outstanding
loan  portfolio  offset in part by a 3% point decrease  in  the  gross
portfolio  yield.  The  primary  reason  the  gross  portfolio   yield
decreased  is  the  result of a lower effective  "APR"  amortizing  to
finance income (see discussion on pg. 13 below delinquency table). The
primary  reason that net finance receivables increased was the opening
of two additional branch offices.

Computer Software Business

     In  fiscal 1997, the revenues of NDS were $460,019 compared  with
fiscal  1996  revenues of $565,645, a decrease of 19%.  This  decrease
was  primarily due to a decrease in new computer installations  during
fiscal  1997. The operating loss for fiscal 1997 was $11,665  compared
with  an  operating   loss  of $20,298 for fiscal  1996.  The  Company
expects both operating revenues and income of NDS to remain flat.

Operating Expenses

   Operating expenses excluding provision for credit losses,  interest
expense  and deferred compensation expense, increased to $2.8  million
in fiscal 1997 from $2.5 million  in fiscal 1996. This increase of 13%
was  primarily  attributable to the  opening of  the  two  new  branch
offices  which  included additional staffing costs, capital  equipment
costs  and related expenses. The Company has increased its work  force
over the last 3 years from 12 to 52 full time employees.

Interest Expense

   Interest  expense  increased to $1.6  million  in  fiscal  1997  as
compared to $1.5 million  in fiscal 1996. This increase was  due to an
increase in average outstanding borrowings from $14.2 million to $16.6
million.  The effect of this increase was offset in part by a decrease
in  the Company's effective average cost of borrowing from 10.70%  for
fiscal  1996  to 10.00% for fiscal 1997. The Company receives  a  more
favorable interest rate as average outstanding borrowings increase.

Analysis of Credit Losses

   Because of the nature of the borrowers under the Contracts and  its
direct  consumer loan program, the Company considers the establishment
of  adequate reserves for credit losses to be imperative.  The Company
batches its Contracts into pools for purposes of establishing reserves
for  losses.   Each  such pool consists of the loans  purchased  by  a
Company  branch office during a three month period.  The average  pool
consists of 72 Contracts with an aggregate initial principal amount of
approximately  $533,000.  As of March 31, 1997, the  Company  had  120
active  pools. The Company analyzes loan pools monthly and  recomputes
the  effective  return  for each pool based upon  changes  during  the
month.

  The Company pools contracts according to branch location because the
branches purchase contracts in different markets located in the  State
of Florida and  Georgia. All contracts purchased by a branch during  a
fiscal  quarter comprise a pool. This method of pooling by branch  and
quarter allows the Company to evaluate the different markets where the
branches  operate. The pools also allow the Company  to  evaluate  the
different  levels of customer income, stability, credit  history,  and
the types of automobiles purchased in each market.

<PAGE> 12

   A  pool,  retains an amount equal to 100% of the  discount  into  a
reserve  for  credit  losses.  In situations  where  the  discount  is
determined   to  be  insufficient  to  absorb  all  potential   losses
associated  with  the  pool,  a  portion  of  future  unearned  income
associated  with that specific pool will be added to the reserves  for
credit losses until total reserves have reached the appropriate level.
If  the reserve for credit losses is exhausted for a pool which is not
fully  liquidated, then a charge to income will be used to reestablish
the  reserves.  If  a pool is fully liquidated and has  any  remaining
reserves, the excess reserves are recognized as income.

   In analyzing a pool, the Company considers the performance of prior
pools  originated  by  the  branch office, the  performance  of  prior
Contracts  purchased from the dealers whose Contracts are included  in
the  current  pool,  the  credit rating of  the  borrowers  under  the
Contracts  in  the  pool, and current market and economic  conditions.
Each  pool  is analyzed monthly to determine if the loss reserves  are
adequate  and  adjustments  are made if  they  are  determined  to  be
necessary.  As of March 31, 1997, the Company had established reserves
for  losses on Contracts of $4,429,231, or 11.45% of gross outstanding
receivables  under  the Contracts.  The historical  default  rate  for
Contracts purchased by the Company has been approximately 15% percent,
i.e.,  15%  of the Contracts are never fully paid.  The experience  of
the  Company  is that the longer the period of time during  which  the
borrower  has  made payments under his Contract, the  less  likelihood
there is of a default.  Historically, approximately 60% percent of the
losses experienced by the Company have occurred during the first third
of the Contract terms.

   Because  of  the  small number of direct consumer  loans  currently
outstanding, a reserve for losses is established at the time the  loan
is  made. When the volume of such loans increases, the Company intends
to  utilize  a pooling arrangement similar to that used in  connection
with  Contracts in establishing reserves.   As of March 31, 1997,  the
Company  had not experienced material losses under its direct consumer
loan program.


<PAGE> 13

   The  following  tables  present certain information  regarding  the
delinquency rates experienced by the Company with respect to Contracts
and under its direct consumer loan program:

<TABLE>
<CAPTION>
                                        Year Ended              Year Ended
                                      March 31, 1997           March 31, 1996
                                     ________________         ________________
<S>                                 <C>           <C>        <C>           <C>
Contracts
Gross Balance Outstanding            $37,813,944              $27,250,451


                                         Dollar                    Dollar
Delinquencies                            Amount    Percent*        Amount   Percent*

30 to 59 days                        $1,398,101     3.70%      $1,346,150     4.94%
60 to 89 days                           251,663     0.67%         326,542     1.20%
90 + days                               118,680     0.31%          44,746     0.16%
                                     ___________               ___________
Total Delinquencies                  $1,768,444                $1,717,438

*Total Delinquencies as a
 percent of outstanding balance                     4.68%                     6.30%



Direct Loans
Net Balance Outstanding                $736,115                  $459,147

Delinquencies

30 to 59 days                             5,555     0.75%             321     0.07%
60 to 89 days                             2,549     0.35%           3,197     0.70%
90 + days                                 4,029     0.55%               0     0.00%
                                        _______                    _______
Total Delinquencies                     $12,133                    $3,518

Total Delinquencies as a
% of outstanding Balance                            1.65%                     0.77%

</TABLE>


The  provision  for  credit  losses was $438,510  in  fiscal  1997  as
compared  to $486,440 in fiscal 1996 in spite of an approximately  40%
increase  in gross finance receivables. This was due to the following;
the Company has increased the amount of initial reserves set up at the
time the Contracts are purchased by utilizing the entire amount of the
discount  associated  with a  pool of Contracts and  then  subsidizing
that  reserve  by  reclassifying a portion  of  the  unearned  finance
charges  related  to  that particular pool. Management  believes  this
method more accurately estimates the overall reserve it believes  will
be necessary to meet the expected losses associated with that pool. As
a  result  of  estimating losses more accurately fewer pools  required
additional  reserves  that  would have to  be  increased  through  the
provision  for credit losses. During fiscal 1997, a larger portion  of
unearned finance charges (at the time the contract was purchased)  was
reclassified  to  reserve for credit losses.  This  caused  the  gross
portfolio yield to decrease, while the provision for credit losses was
favorably impacted.

<PAGE> 14

Income Taxes

   The  provision  for income taxes in fiscal 1997  increased  25%  to
$497,276  from  $396,750 in fiscal 1996 as a result of  higher  pretax
income.   The  Company's effective tax rate increased  from  37.5%  in
fiscal 1996 to 38.6% in fiscal 1997.

Deferred Compensation

       Deferred compensation decreased from $266,754 in fiscal 1996 to
none  in fiscal 1997 primarily because compensatory stock options  and
warrants became fully vested in fiscal 1996.

Net Income

         As  a result of the above factors, net income increased  from
$662,151 in fiscal 1996 to $792,254 in fiscal 1997.


Liquidity And Capital Resources

The  Company's cash flows for fiscal 1997 and 1996  are summarized  as
follows:
<TABLE>
<CAPTION>
                                           Fiscal          Fiscal
                                            1997            1996
                                         __________      ___________
<S>	                       			    		    <C>              <C>
Cash provided by (used in):
  Operations                             $1,668,044       $1,234,592
  Investing Activities -
   (primarily purchase of installment
    contracts)                           (8,119,637)      (6,128,516)

  Financing activities                    6,068,950        5,101,373
  Net increase (decrease) in cash          (382,643)         207,449

</TABLE>

      The  Company's primary use of working capital during fiscal year
1997 was the funding of the purchase of Contracts.  The Contracts were
financed substantially through borrowings on the Company's $25 million
line  of credit.  The line of credit, which expires in June 1998,   is
secured primarily  by Contracts, and available borrowings are based on
a percentage of qualifying Contracts. As of March 31, 1997 the Company
had  approximately $7.3 million available under the  line  of  credit.
Since  inception, the Company has also funded a portion of its working
capital needs from cash flows from operating activities.

      Net  cash provided by operating activities totalled $1.7 million
and $1.2 million during fiscal 1997 and 1996, respectively.

      In October 1996, the Company successfully  completed a secondary 
common stock offering.The net proceeds from the offering of $1,969,520 
were used to repay certain  outstanding debt and for general corporate
purposes, including future branch expansion.

      The self-liquidating nature of installment  Contracts  and other
loans  enables  the Company  to assume a  higher  debt-to-equity ratio
than in most businesses.  The amount of  debt the Company  incurs from
time to time under these financing mechanisms depends on the Company's 
need for cash and it's ability to borrow  under the  terms of its line
of  credit. The Company believes  that borrowings  available under the
line of credit as well as cash flow from operations and, if necessary,
the  issuance  of  additional  subordinated   debt  and  or additional
securities in the capital markets,will be sufficient to meet its short
and long-term funding needs.

  The  Company  is also in the process of negotiating an increase  and
extension in its current credit line.

<PAGE> 15



Impact of Inflation

      The  Company  is  affected by inflation primarily  by  increased
operating  costs  and expenses.  Inflationary pressures  on  operating
costs  and  expenses  have  been offset  by  the  Company's  continued
emphasis  on tight operating and cost controls and to a lesser  extent
by  modest  increases  in support rates from its software  subsidiary,
Nicholas Data Services. Management believes that the Company's  strong
balance  sheet  has enabled it to negotiate favorable  interest  rates
which minimized the impact of prime rate increases.

      The  Company  believes  that a downturn  in  the  economy  would
increase  the  number  of  purchasers  of  automobiles  financed  with
Contracts.  During a modest downturn in economic activity more  people
will experience a reduction in income because of downsizing, fewer and
smaller  raises and the necessity of accepting lower paying jobs.   In
addition,  it  may be difficult for individuals who have over-extended
themselves  to  meet  their debt obligations  and  they  may  find  it
necessary to purchase used automobiles rather than new ones.  Although
the  number of potential customers can be expected to increase  during
periods  of slow economic activity, the number of defaults in  payment
obligations can also be expected to increase with a resulting increase
in  repossessions of vehicles securing Contracts.  The Company is  not
able to predict whether or not the net effect of such a downturn would
be  favorable or unfavorable to the operating results of the  Company,
although  the  Company  believes that a severe  downturn  in  economic
activities would have an adverse effect on its business.


Future Expansion

      The  Company  intends  to  continue its  expansion  through  the
purchase  of  additional  Contracts and the expansion  of  its  direct
consumer  loan  program.   In  order  to  increase  the  size  of  its
investment  portfolio  of  Contracts, it will  be  necessary  for  the
Company to open additional branch offices and increase the size of its
revolving  line  of credit arrangement, either with  Bank  of  America
Business   Credit  or  another  lender.   The  Company  is   currently
negotiating  with several private investors and financial institutions
that  specialize  in  investing  in subordinated  debt.   The  Company
believes  that  the addition of more debt that is subordinate  to  the
line  of  credit will make it possible for the Company to continue  to
meet  or  exceed its covenants under the loan agreement with, increase
the  amount of funds drawn down under its line of credit and  to  draw
down  funds under the line at a faster rate.  The Company also intends
to  continue its policy of not paying dividends and using any earnings
from  operations to purchase Contracts or make direct consumer  loans.
The Company believes that opportunity for growth continues to exist in
the  State of Florida and the State of Georgia and for the foreseeable
future intends to concentrate its expansion activities there.


<PAGE> 16

Item 7. Financial Statements

The following financial statements are filed as part of this report;

  Report of Independent Auditors..............................F - 1

  Audited Consolidated Financial Statements

  Consolidated Balance Sheets.................................F - 2
  Consolidated Statements of Income and Retained Earnings.....F - 3
  Consolidated Statements of Cash Flows.......................F - 4
  Notes to the Consolidated Financial Statements..............F - 5




Item  8.  Changes In and Disagreements with Accountants on  Accounting
and Financial Disclosure

     None.

<PAGE> 16
                              PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons

Name                 Age     Position
______               ___     ________

Peter L. Vosotas     55      Chairman, Chief Executive Officer  and
                             President  of Nicholas Financial-Canada,
                             Nicholas Financial and NDS

Raymond Cottrell     50      Director of Nicholas Financial-Canada

Joseph G. Bowes      42      Director of Nicholas Financial-Canada

Keith A. Bertholf    41      Director of Nicholas Financial and NDS
                             and  Secretary  and  Vice President-Operations
                             of Nicholas Financial-Canada, 
                             Nicholas Financial and NDS

Ralph T. Finkenbrink 36      Vice  President-Finance  of  Nicholas
                             Financial-Canada, Nicholas Financial 
                             and  NDS

Ellis P. Hyman       58      Director of Nicholas Financial and NDS

Stephen Bragin       65      Director of Nicholas Financial and NDS


      All  directors hold office until the next annual meeting of  the
shareholders  of  the  Company or until  their  successors  have  been
elected and qualified.  Officers serve at the discretion of the  board
of  Directors.   Additional information regarding  the  directors  and
officers is set forth below.

      Peter  L.  Vosotas  is the founder of the Company  and  majority
stockholder of Nicholas Financial-Canada.  He has served as  Chairman,
Chief Executive Officer and President of Nicholas Financial-Canada and
each  subsidiary since formation.  Prior to forming the  Company,  Mr.
Vosotas  held  a  variety of Sales and Marketing positions  with  Ford
Motor Company, GTE and AT&T Paradyne Corporation.  Mr Vosotas attended
the  United  States  Naval Academy and earned a  Bachelor  of  Science
Degree in Electrical Engineering from the University of New Hampshire.

      Raymond Cottrell has served as a Director of Nicholas Financial-
Canada  since  November 1990.  Since 1987, he has been a Director  and
President  of  Grey  Point  Capital, Inc., ERI  Ventures  Inc.and  ICM
Ventures,  Inc.,  all  located in Vancouver,  British  Columbia.   Mr.
Cottrell  has  been Executive Vice President of Biocoll Medical  Corp.
since  September, 1994. He is a member of the Board  of  Directors  of
Golden Knight Resources, Inc., and Annex Ventures Inc.

      Joseph  G. Bowes has served as a director of Nicholas Financial-
Canada  since  June  1991.   He  has been  a  self-employed  Financial
Consultant  in  Vancouver,  British Columbia  since  1990.   Prior  to
starting  his  consulting firm, Mr. Bowes was Vice President,  Finance
and Administration and Director of Achievers International, Vancouver,
B.C.   Mr.  Bowes  is  a Chartered Public Accountant  and  received  a
Masters  Degree  in  Business Administration from  the  University  of
Western Ontario.

     Ellis P. Hyman has served as a Director of Nicholas Financial and
NDS since September 1986.  Dr. Hyman has been a practicing dentist  in
Clearwater, Florida for over fifteen years.

     Stephen Bragin has served as a Director of Nicholas Financial and
NDS  since  May  1989.   Since 1993, Mr. Bragin has  been  Development
Director, University of South Florida, Tampa, Florida.  Prior  to  his
involvement  with  the  University, Mr Bragin was,  for  36  years,  a
principal  in  a  commercial  citrus  business  based  in  Clearwater,
Florida.  He is also a director of Curlew Gardens, Clearwater Florida,
and The First National Bank of Commerce, Clearwater, Florida.


<PAGE> 18

     Keith A. Bertholf has been an employee of the Company since March
1985  and  held  a variety of sales and marketing positions  with  the
Company  prior  to  his  appointment as Vice  President-Operations  of
Nicholas  Financial  and  NDS in 1991.  He has  been  a  Director  and
Secretary  of  Nicholas Financial and NDS since  1992.   Mr.  Bertholf
received  a  Bachelors  Degree in Accounting from  the  University  of
Kansas.

      Ralph  T.  Finkenbrink has been employed by  the  Company  since
August 1988.  Mr. Finkenbrink held the position of Controller prior to
assuming his present duties in 1992.  Prior to joining the Company, he
was  a staff accountant for MBI, Inc. from January 1984 to March  1985
and Inventory Control Manager for The Dress Barn, Inc. from March 1985
to  December 1987.  Mr. Finkenbrink received his Bachelor  of  Science
Degree  in  Accounting from Mount St. Mary's University in Emmitsburg,
Maryland.


Item 10. Executive Compensation

Executive Officers

      The following table sets forth a summary of compensation paid by
the  Company  to  its  Chief Executive Officer.  There  are  no  other
officers   who  received  compensation  exceeding  in  the   aggregate
$100,000.

<TABLE>
<CAPTION>
                      Summary Compensation Table
                       (stated in U.S. dollars)

<S>                     <C>          <C>           <C>            <C>        
                                                                   Securities 
                                                                   Underlying
Name and Position        Year         Salary        Bonus            Options
___________________      ____         _______       _____            _______
    
Peter L. Vosotas         1997         $98,000       $12,500          100,000
 Chief Executive Officer 1996         $98,000       $21,864          100,000
 and Director            1995         $88,000       $23,900          100,000

</TABLE>

     Option Grants During The Most Recently Completed Fiscal Year


<TABLE>

<S>                <C>             <C>            <C>          <C>                 <C>
                                    % Of Total                     Market Price
                                      Options                     Of Securities
                       Options       Granted To     Exercise Or    Expiration
Name of Executive   Granted To All    Employees      Underlying    Options On Date  Expire
Granted Officer           (#)       In Fiscal Year   ($/SHARE)   Of Grant($/SHARE)   Date
_________________   ______________  ______________  ___________  _________________  ______
                         none

</TABLE>

     There are no other plans in effect pursuant to which cash or non-
cash  compensation  was paid or distributed to the executive  officers
during  the  most recent fiscal year or pursuant to which compensation
is proposed to be paid or distributed in a subsequent year.

      The  only  other benefit plans offered at the present  time  are
health  and  life  insurance, long-term disability  insurance,  dental
insurance, and a 401(k) plan.  All of these plans are available to all
full-time employees on a non-discriminatory basis.

      The current policy of the Company is to compensate directors who
are  not  officers $400 for attending each director's meeting  and  in
addition  directors are awarded annually, options  to  purchase  2,000
shares of common stock at the current market price. The options have a
term  of two years. Directors are reimbursed for related out-of-pocket
expenses of attending meetings.

<PAGE> 19


Item   11.  Security  Ownership  of  Certain  Beneficial  Owners   and
Management

      The following table sets forth certain information regarding the
Common Stock owned on March 31, 1997, by (1) any person (including any
"group") who is known by the Company to own beneficially more than  5%
of  its  outstanding Common Stock, (2) each director and officer,  and
(3) all officers and directors as a group.


Name and Address                Shares Owned      Percentage

Peter L. Vosotas
2454 McMullen Booth Road
Clearwater, FL 34619            3,333,500 (1)          40.14%

Keith A. Bertholf
2454 McMullen Booth Road
Clearwater, FL 34619              160,800 (2)           1.94%

Ralph T. Finkenbrink
2454 McMullen Booth
Clearwater, Fl. 34619              23,400 (3)               *

Joseph Bowes
1826 W. 63rd. Avenue
Vancouver, B.C. V6P-2J1             5,000 (4)               *

Raymond Cottrell
2250-650 W. Georgia St.
Vancouver, B.C., V6B-4N7            5,000 (5)               *

Dr. Ellis Hyman
2454 McMullen Booth Road
Clearwater, FL 34619              252,977 (6)           3.05%

Stephen Bragin
2454 McMullen Booth Road
Clearwater, FL 34619              157,708 (7)           1.90%

William G. Taylor
104 E. Springs St.
Lancaster, S.C 29721              194,118               2.42%


All directors and officers
 as a group (6 persons)         4,132,503 (8)          51.45%

*  Represents less than 1% of the outstanding Common Stock.

(1)                              Includes 100,000 shares issuable upon
  exercise  of  certain  options and 1,000,000  shares  issuable  upon
  exercise of warrants exercisable within 60 days of March 31, 1997.

(2)   Includes 56,000 shares issuable upon exercise of certain options
  exercisable within 60 days of March 31, 1997.

(3)   Includes 23,400 shares issuable upon exercise of certain options
  exercisable within 60 days of March 31, 1997.

(4)Includes  5,000  shares issuable upon exercise of  certain  options
   exercisable within 60 days of March 31, 1997.

(5)                              Includes  5,000 shares issuable  upon
  exercise of certain options exercisable within 60 days of March  31,
  1997.

(6)                              Includes 72,727 shares issuable  upon
  conversion of Notes exercisable within 60 days of March 31, 1997.


<PAGE> 20

(7)                              Includes 75,400 shares issuable  upon
  exercise  of  certain  options and conversion of  Notes  exercisable
  within 60 days of March 31, 1997.

(8)                              Includes  1,314,127  shares  issuable
  upon   exercise  of  certain  options,  warrants  and   compensation
  arrangements exercisable within 60 days of March 31, 1997.


Item 12.  Certain Relationships and Related Transactions

   In  April 1996, Dr. Ellis Hyman  agreed to subordinate $200,000  of
debt at 12% interest with quarterly interest payments only. The entire
principal balance plus accrued interest is due on April 20, 2000.


<PAGE> 21

Item 13. Exhibits and Reports on Form 8-K

Insert # 1

    (a)  Exhibits

3.1 Articles of Incorporation and By-Laws

    Incorporated by reference to the Company's Form 10-SB. File No. 0-
    26680

4.1 Stock Certificate

    Incorporated by reference to the Company's Form 10-SB. File No. 0-
    26680

10.1.1  Loan  and Security Agreement dated March 31, 1993  between  BA
    Business Credit, Inc. and Nicholas Financial, Inc.

    Incorporated by reference to the Company's Form 10-SB. File No. 0-
    26680

10.1.2 Loan Modification Agreement dated January 14, 1994

    Incorporated by reference to the Company's Form 10-SB. File No. 0-
    26680

10.1.3 Temporary Line Increase Agreement dated Mach 28, 1994

    Incorporated by reference to the Company's Form 10-SB. File No. 0-
    26680

10.1.4 Second Loan Modification Agreement dated June 3, 1994

    Incorporated by reference to the Company's Form 10-SB. File No. 0-
    26680

10.1.5 Amendment No. 3 to Loan Agreement dated July 5, 1994

    Incorporated by reference to the Company's Form 10-SB. File No. 0-
    26680

10.1.6 Amendment No. 4 to Loan Agreement and Security Agreement

    Incorporated by reference to the Company's Form 10-SB. File No. 0-
    26680

10.1.7 Fifth Loan Modification Agreement dated July 13, 1995

    Incorporated by reference to the Company's Form 10-KSB

10.1.8 Sixth Loan Modification Agreement dated May 13, 1996

    Incorporated by reference to the Company's Form 10-QSB

11.    Statement re: Computation of per share earnings

16.1 Letter on Change in Certifying Accountants

    Incorporated by reference to the Company's Form 10-SB. File No. 0-
    26680

21.1Registrant's Subsidiaries

     (b)   The  Company  filed a Form 8K dated  January  29,  1997  in
connection        with       the       announcement        of        a
portfolio acquisition . The form 8K disclosed information pursuant  to
Item 5 of Form 8K.

27          Financial Data Schedule

<PAGE> 22
                                 Nicholas Financial,Inc.
                                       Exhibit 11

                    Schedule for Computation of Earnings Per Share

<TABLE>
<CAPTION>

                                                    Fiscal Year Ended
                                                         March 31
                                                    1997             1996
                                                    ---------------------
<S>                                              <C>          <C>
Net Income                                          $792,254     $662,151
                                                    =====================

Weighted average number of common
 shares outstanding during the period              6,404,764    5,813,438

Add: Primary common equivalent shares
 determined using the "treasury stock" 
 method representing shares issuable upon
 exercise of stock options and warrants              198,062      224,282
                                                  -----------------------
Weighted average number fo shares used
 in Primary EPS calculation                        6,602,826    6,037,720
                                                  =======================

Add: Fully Diluted common equivalent 
 shares determined using the "treasury 
 stock" method representing shares
 issuable upon exercise of stock options
 and warrants                                        247,167      490,177
                                                  -----------------------
Weighted average number of shares used 
 in Fully Diluted EPS calculation                  6,651,931    6,303,615
                                                  =======================

Primary Earnings Per Share                             $0.12        $0.11
                                                  =======================
Fully Diluted Earnings Per Share                       $0.12        $0.11
                                                  =======================

</TABLE>

<PAGE>  23
 
                              SIGNATURES


      Pursuant  to  the requirements of Section 13  or  15(d)  of  the
Securities  Exchange  Act  of  1934, the Registrant  has  duly  caused
this   Report   to  be  signed  on  its  behalf  by  the   undersigned
thereunto duly authorized.

                                   NICHOLAS FINANCIAL, INC.


Dated: June 26, 1997
                                   /s/ Peter L. Vosotas
                                   ----------------------------
                                   Peter L. Vosotas



      Pursuant  to  the  requirements of the Securities  Exchange  Act
of  1934,  this  Report  has been signed by the following  persons  on
behalf  of  the  Registrant and in the capacities  and  on  the  dates
indicated.

Signature                     Title                    Date


/s/ Peter L. Vosotas          President and            June  26,1997
-----------------------
Peter L. Vosotas              Director



/s/ Ralph T. Finkenbrink      Principal                June  26,1997
-------------------------
Ralph T. Finkenbrink          Financial Officer



/s/ Raymond Cottrell          Director                 June  26,1997
------------------------
Raymond Cottrell



/s/ Joseph G. Bowes           Director                 June  26,1997
------------------------
Joseph G. Bowes

<PAGE>                          
                          
                          
                    Nicholas Financial, Inc.
                                
                Consolidated Financial Statements
                                
                                
               Years ended March 31, 1997 and 1996
                                
                                
                                
                                
                            Contents

Report of Independent Auditors................................F-1

Audited Consolidated Financial Statements

Consolidated Balance Sheets...................................F-2
Consolidated Statements of Income and Retained Earnings.......F-3
Consolidated Statements of Cash Flows.........................F-4
Notes to the Consolidated Financial Statements................F-5



<PAGE> F-1




                 Report of Independent Auditors

To the Board of Directors of
Nicholas Financial, Inc.

We have audited the accompanying consolidated balance sheets of
Nicholas Financial, Inc. as of March 31, 1997 and 1996, and the
related consolidated statements of income and retained earnings
and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of Nicholas Financial, Inc. at March 31, 1997
and 1996, and the consolidated results of its operations and its
cash flows for the years then ended in conformity with generally
accepted accounting principles.



                                             ERNST & YOUNG, LLP


May 7, 1997

<PAGE> F-2

<TABLE>
<CAPTION>
                    Nicholas Financial, Inc.
                                
                   Consolidated Balance Sheets

                                                       March 31
                                                 1997            1996
                                           _______________   _____________

<S>		                           				          <C>             <C>
Assets                                                   
Cash                                           $   108,148     $   490,791
Finance receivables, net                        25,923,091      18,326,784
Accounts receivable                                 32,224          25,154
Prepaid expenses and other assets                  363,571         292,857
Property and equipment, net                        182,341         180,417
Deferred income taxes                              411,367         485,798
                                               -----------     -----------
Total assets                                   $27,020,742     $19,801,801
                                               ===========     ===========                                                      
Liabilities                                              
Line of credit                                 $17,680,594     $13,130,365
Notes payable-related party                      1,756,095       2,226,533
Accounts payable                                 1,274,024         851,258
Deferred revenues                                  174,014         188,894
Income taxes payable                                72,927         122,082
Other liabilities                                   27,810          28,804
                                               -----------     -----------
                                                20,985,464      16,547,936
                                                         
Shareholders' equity                                     
Preferred stock, no par: 5,000,000 shares                
 authorized; none issued and outstanding                 -               -
Common stock, no par: 20,000,000 shares                   
 authorized; 6,990,544 and 5,838,339 shares               
 issued and outstanding, respectively            3,713,210       1,724,051
Retained earnings                                2,322,068       1,529,814
                                               -----------     -----------
                                                 6,035,278       3,253,865
                                               -----------     -----------
Total liabilities and shareholders' equity     $27,020,742     $19,801,801
                                               ===========     ===========

</TABLE>

See accompanying notes.

<PAGE> F-3

<TABLE>
<CAPTION>
                    Nicholas Financial, Inc.
                                
     Consolidated Statements of Income and Retained Earnings


                                                 Year ended March 31
                                                 1997           1996
                                            -------------   -------------
<S>                                          <C>             <C>

Revenue:                                                 
 Interest income on finance receivables       $5,749,410      $5,267,530
 Sales                                           459,719         565,645
                                              ----------      ---------- 
                                               6,209,129       5,833,175
Expenses:                                                
 Cost of sales                                    98,833         140,786
 Marketing                                       248,482         216,198
 Administrative                                2,391,945       2,060,251
 Provision for credit losses                     438,510         486,440
 Deferred compensation expense                                   266,754
 Depreciation and amortization                    85,427          86,664
 Interest expense                              1,656,402       1,517,181
                                              ----------      ----------
                                               4,919,599       4,774,274
                                              ----------      ----------
Operating income before income taxes           1,289,530       1,058,901
                                                         
Income tax expense (benefit):                            
 Current                                         422,845         550,346
 Deferred                                         74,431        (153,596)
                                              ----------      ----------
                                                 497,276         396,750
                                              ----------      ----------
Net income                                       792,254         662,151
                                                         
Retained earnings, beginning of year           1,529,814         867,663
                                              ----------      ----------
Retained earnings, end of year                $2,322,068      $1,529,814
                                              ==========      ==========  

Net income per common and common equivalent 
 share                                             $0.12           $0.11
                                              ==========      ==========
                                                         
                                                         
Weighted average number of common and common             
 equivalent shares                             6,602,826       6,037,720
                                              ==========      ==========
</TABLE>

See accompanying notes.
<PAGE> F-4
<TABLE>
<CAPTION>
                    Nicholas Financial, Inc.
                                
              Consolidated Statements of Cash Flows


                                                Year ended March 31
                                                 1997           1996
                                            -------------   -------------

<S>                                           <C>            <C>
Cash flows from operating activities                     
Net income                                     $  792,254      $  662,151
Adjustments to reconcile net income to net               
cash flows provided
 by operating activities:
  Depreciation of property and equipment           82,897          73,562
  Provision for credit losses                     438,510         486,440
  Amortization of intangible assets and            22,157          42,502
deferred loan costs
  Deferred compensation expense                         -         266,754
  Deferred income taxes                            74,431        (153,196)
  Changes in operating assets and                        
liabilities:
   Accounts receivable                             (7,070)          2,838
   Prepaid expenses and other assets              (92,871)        (67,208)
   Deferred revenues                              (14,880)         48,356
   Accounts payable                               422,765           9,986
   Other liabilities                                 (994)       (147,367)
   Income taxes payable                           (49,155)          9,774
                                                ----------      ---------
Net cash provided by operating activities       1,668,044       1,234,592
                                                         
Investing activities                                     
Increase in finance receivables, net of        
 principal collected                           (8,034,817)     (6,033,139)
Purchase of property and equipment                (84,820)        (67,377)
Increase in deferred loan costs                         -         (28,000)
                                                ---------       ---------
Net cash used by investing activities          (8,119,637)     (6,128,516)

Financing activities                                     
Repayment of notes payable-related party and             
 line of credit borrowings                       (470,438)     (5,670,031)
Proceeds from notes payable-related party and            
 line of credit borrowings                      4,550,229      10,700,000
Proceeds from sale of the Company's common      
 stock                                          1,989,159          71,404
                                                ---------       ---------
Net cash provided by financing activities       6,068,950       5,101,373
                                                ---------       ---------
Net increase (decrease) in cash                  (382,643)        207,449
Cash, beginning of year                           490,791         283,242
                                                ---------       ---------
Cash, end of year                                $108,148        $490,791
                                                =========       =========
</TABLE>

See accompanying notes.
<PAGE> F-5


                    Nicholas Financial, Inc.
                                
         Notes to the Consolidated Financial Statements

                         March 31, 1997


1. Organization

Nicholas Financial, Inc. (NFI, Canada) is a Canadian holding
company incorporated under the laws of British Columbia with two
wholly-owned United States subsidiaries, Nicholas Data Services,
Inc. (NDSI) and Nicholas Financial, Inc. (NFI). NDSI is engaged
principally in the development, marketing and support of computer
application software. NFI is engaged principally in providing
installment sales financing. Both NDSI and NFI are based in
Florida, U.S.A.

2. Accounting Policies

Consolidation

The consolidated financial statements include the accounts of
NFI, Canada and its wholly-owned subsidiaries, NDSI and NFI,
collectively referred to as the Company. All intercompany
transactions and balances have been eliminated.

Property and Equipment

Property and equipment are recorded at cost. Expenditures for
repairs and maintenance are charged to expense as incurred.
Depreciation of property and equipment is computed using the
straight-line method (accelerated method for assets acquired
prior to April 1, 1994) over the estimated useful lives of the
assets as follows:

          Automotive                            3 years
          Equipment                             5 years
          Furniture and fixtures                7 years
          Leasehold improvements             Lease term

<PAGE> F-6

2. Accounting Policies (continued)


Allowance for Loan Losses

The allowance for loan losses is increased by charges against
earnings and decreased by charge-offs (net of recoveries). In
addition to the allowance for loan losses, a nonrefundable dealer
reserve has been established using unearned interest and dealer
discounts to absorb future credit losses. To the extent actual
credit losses exceed these reserves, a bad debt provision is
recorded and to the extent credit losses are less than the
reserve, the reserve is accreted into income as an adjustment to
the interest yield over the term of the underlying finance
receivables.

Management's periodic evaluation of the adequacy of the allowance
is based on the Company's past loan experience, known and
inherent risks in the portfolio, adverse situations that may
affect the borrower's ability to repay, the estimated value of
any underlying collateral, and current economic conditions.

Deferred Loan Costs

The Company defers costs related to obtaining its own financing .
Such costs are charged to operations as an adjustment of interest
expense over the life of the related financing.

Income Taxes

The Company accounts for income taxes under the provisions of
Statement of Financial Accounting Standards No. 109, Accounting
for Income Taxes, which requires the use of an asset and
liability approach for financial accounting and reporting.

Revenue Recognition

Revenues resulting from the sale of hardware and software are
recognized upon delivery of the goods. Revenues from software
support maintenance and lease agreements are recognized pro rata
over the life of the agreements. The unamortized amounts are
included in the caption "deferred revenues."

<PAGE> F-7

2. Accounting Policies (continued)

Interest income on finance receivables is recognized using the
interest (actuarial) method. Accrual of interest income on
finance receivables is suspended when a loan is contractually
delinquent for 60 days or more or the collateral is repossessed,
whichever is earlier.

Earnings Per Share

Earnings per share is calculated using the weighted average
number of common shares outstanding during the year, adjusted for
the dilutive effect of stock options and warrants and is the same
on both a primary and fully-diluted basis. Supplementary earnings
per share data described in Accounting Principles Board NO. 15
(Computing Earnings Per Share)  is not materially different from
the earnings per share which is presented.

Stock Option Accounting

In October 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 123, "Accounting
for Stock-Based Compensation" (FAS 123) , effective for
accounting years beginning after December 10, 1995. FAS 123
provides alternatives for the methods used by entities to record
compensation expense associated with its stock-based compensation
plans. Additionally, FAS 123 provides further guidance on the
disclosure requirements relating to stock-based compensation
plans. The Company has elected to follow Accounting Principles
Board Opinion No. 25, "Accounting for Stock Issued to Employees."
(APB 25) , and related interpretations in accounting for its
stock option grants.

Financial Instruments

The Company's financial instruments consist of accounts
receivable, finance receivables, line of credit, notes
payable-related party and accounts payable. For each of these
financial instruments, the carrying value approximates its fair
value.

The Company's financial instruments that are exposed to
concentrations of credit risk are primarily finance receivables,
which are concentrated in the States of Florida and Georgia. The
Company provides credit during the normal course of business and
performs ongoing credit evaluations of it customers. The Company
maintains allowances for potential credit losses which, when
realized, have been within the range of management's
expectations. The Company perfects a primary interest in all
vehicles financed as a form of collateral.

<PAGE> F-8

2. Accounting Policies (continued)

Use of Estimates

The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported
in the financial statements and accompanying notes. Actual
results could differ from those estimates.

Statement of Cash Flows

Cash paid for income taxes for the years ended March 31, 1997 and
1996 was $472,000 and $540,167, respectively. Cash paid for
interest for the years ended March 31, 1997 and 1996 was
$1,641,060 and $1,447,437, respectively.


3. Finance Receivables

Finance receivables consist of consumer automobile finance
installment contracts and are detailed as follows:

<TABLE>
<CAPTION>

                                          1997           1996
                                      ------------    -----------
    <S>                               <C>            <C>
     Finance receivables, gross        $38,687,652    $27,814,597
     contract
     Less:                                         
      Unearned interest                 (8,335,330)    (6,412,953)
                                       -----------    -----------
                                        30,352,322     21,401,644
                                                   
        Nonrefundable dealer reserve    (3,253,513)    (2,229,571)
        Allowance for credit losses     (1,175,718)      (845,289)
                                       -----------    -----------
        Finance receivables, net       $25,923,091    $18,326,784
                                       ===========    ===========

</TABLE>

The terms of the receivables range from 6 to 60 months and bear a
weighted average effective interest rate of  25% for both 1997
and 1996, respectively.


<PAGE> F-9
<TABLE>
<CAPTION>
4. Property and Equipment

                                                    Accumulated      Net Book
                                           Cost     Depreciation       Value
                                    -------------------------------------------           
    <S>                               <C>            <C>            <C> 
     1997                                           
     Automotive                        $119,159          $90,515      $28,644
     Equipment                          255,079          151,710      103,369
     Furniture and fixtures              87,290           51,386       35,904
     Leasehold improvements              59,392           44,968       14,424
                                    -------------------------------------------
                                       $520,920         $338,579     $182,341
                                    ===========================================

     1996                                           
     Automotive                        $118,246         $ 64,740     $ 53,506
     Equipment                          203,586          117,114       86,473
     Furniture and fixtures              76,708           42,676       34,032
     Leasehold improvements              40,227           33,820        6,406
                                    -------------------------------------------
                                       $438,767         $258,350     $180,417
                                    ===========================================
</TABLE>

5. Line of Credit

The Company has a $25,000,000 line of credit facility (the Line)
with BA Business Credit, Inc. which expires on June 3, 1998.
Borrowings under the Line bear interest at the Bank of America
prime rate plus 1.25% and 1.00%, when the outstanding balance
exceeds $10,000,000 and $15,000,000, respectively (9.25% at
March 31, 1997). Pledged as collateral for this credit facility
are all of the assets of NFI and the unconditional guarantee of
NDSI, NFI, Canada, and Peter L. Vosotas, a shareholder.

<PAGE> F-10
<TABLE>
<CAPTION>

6. Notes Payable-Related Party

Notes payable to shareholders, directors and individuals related
thereto at March 31:

                                                      1997            1996
                                                  --------------   -------------
    <S>                                           <C>              <C>
     Notes payable, unsecured, with interest             
     at varying rates up to 12%, quarterly               
     and semiannual interest payments and                
     various principal payments due through              
     June 2000, subordinated to the Line. The 
     notes are convertible at the option of              
     the holder, into common shares at prices
     from $2.00 to $2.75 per share.                $1,500,000        $1,800,000
     
     Note payable, unsecured, interest at                
     12%, quarterly principal and interest 
     payments due through March 1997.                       -           150,000

     Notes payable, unsecured interest at                
     12%, quarterly interest due through May  
     1998, at which time the entire balance
     and unpaid interest is due, subordinated
     to the Line.                                     233,341           233,341

     Note payable, unsecured, interest at                
     12%, quarterly principal and interest
     payments due through March 1997.                       -            18,495
                                               
     Note payable, unsecured, interest at                
     12%, quarterly interest payments due                
     through August 1997, at which time the  
     entire principal balance and unpaid
     interest is due.                                   22,754           24,697 
                                                   ------------     -------------
                                                    $1,756,095       $2,226,533
                                                   ============     =============
</TABLE>

Maturities of notes payable are summarized as follows:

     Year ending March 31                          
                                                   
     1998                                          $1,356,095
     1999                                             200,000
     2000                                             200,000
                                                 --------------
                                                   $1,756,095
                                                 ==============

The company incurred interest expense on the above notes of
$250,859 and $260,547 for the years ended March 31, 1997 and
1996, respectively.

<PAGE> F-11

7. Income Taxes

<TABLE>
<CAPTION>

The provision for income taxes reflects an effective tax rate
which differs from the corporate tax rate for the following
reasons:


                                                1997          1996
                                            --------------------------
<S>                                         <C>           <C>
Combined basic Canadian federal and                     
 provincial income tax rate                      45.34%        45.34%
                                             ========================           
 Income before income taxes                  $1,289,530    $1,058,901
                                             ========================
 Provision for income taxes based on above   
  rate                                       $  584,673    $  480,106
 Increase (decrease) resulting from:                    
  NDSI's income taxed at lower (U.S.) rates     (94,431)      (88,718)
  Other                                           7,034         5,362
                                             ------------------------
                                             $  497,276    $  396,750
                                             ========================
</TABLE>

The Company's deferred tax assets consist of the following as of:

<TABLE>
<CAPTION>
                                                   March 31
                                               1997        1996
                                          -----------------------
<S>                                        <C>          <C>
  Allowance for credit losses not           $227,000     $309,000
  deductible for tax purposes
 Deferred compensation related to stock              
  options and warrants                       157,000      157,000
  Other items                                 27,367       19,798
                                          -----------------------
                                            $411,367     $485,798
                                          =======================
</TABLE>


NFI, Canada has income tax loss carryforward balances of
approximately Cdn$242,000 (1996-Cdn$251,000) which are available
to reduce future taxable income and which expire as follows:


     1998                                        Cdn$24,000
     1999                                            32,000
     2000                                            82,000
     2001                                            51,000
     2002                                            21,000
     2003                                            13,000
     2004                                            19,000
                                               -------------
                                                Cdn$242,000
                                               =============


<PAGE> F-12

7. Income Taxes (continued)

For the years ended March 31, 1997 and 1996, the Company would
have recorded deferred tax assets of approximately $66,000 and
$71,000, respectively, due primarily to these Canadian income tax
loss carryforwards. The assets, however, are offset entirely by a
valuation allowance due to the relative uncertainty surrounding
the realization of the assets.


8. Shareholders' Equity

Changes in the outstanding common stock during the years are as
follows:

<TABLE>
<CAPTION>

                                                Number        Common
                                              of Shares        Stock
                                           -------------  -------------           
<S>                                          <C>           <C>
  Balance at March 31, 1995                   5,774,539     $1,385,893
                                                         
  Changes in 1996:                                       
    Issued for cash on exercise of options       39,800         35,004
    Issued in connection with note payable       20,000         28,000
    Issued for services rendered                  4,000          8,400
    Deferred compensation expense                     -        266,754
                                            ------------   ------------
  Balance at March 31, 1996                   5,838,339      1,724,051
                                                         
  Changes in 1997:                                       
    Issued for cash on exercise of options       50,000         19,639
    Issued in connection with secondary       
     offering                                 1,102,205      1,969,520
                                            ------------   ------------
  Balance at March 31, 1997                   6,990,544     $3,713,210
                                            ============   ============

</TABLE>


The Company has a warrant outstanding entitling a director to
purchase 1,000,000 common shares at Cdn$2.55 until June 3, 1999.
At March 31, 1997, the warrant was fully exercisable.

The Company has an employee stock incentive plan (the SIP) for
officers, directors and key employees under which 442,000 shares
of common stock were reserved for issuance as of March 31, 1997.
Options currently granted by the Company generally vest over a
five year period.

<PAGE> F-13

8. Shareholders' Equity (continued)

The Company has elected to follow APB 25 , and related
Interpretations in accounting for its employee stock options
because , as discussed below, the alternative fair value
accounting provided for under FAS 123, requires use of option
valuation models that were not developed for use in valuing
employee stock options. Under APB 25, if the exercise price of
the Company's employee stock options equals the market price of
the underlying stock on the date of grant, no compensation
expense is recognized.

Certain previously granted options and warrants  had exercise
prices that were less than the market price of the underlying
stock and the Company has recorded compensation expense for these
options and warrants. Compensation related to stock options and
warrants is measured at the grant date. The difference between
market value of the options and warrants, at time of issuance,
and their exercise price is charged to compensation expense over
the options and warrants vesting periods. The Company has
recognized $266,754 as compensation expense in 1996, (none in
1997), relating to compensatory options and warrants.

The Company accounts for stock option and warrant cancellations
by reversing, in the year canceled, amounts recognized as expense
in previous years and reducing capital in excess of par value.
The Company also reduces deferred compensation expense and
capital in excess of par value by the amount of the remaining
unamortized  deferred compensation expense which relate to the
canceled stock options and warrants. As a result of cancellations
in 1996, the Company recorded a reduction in previously expensed
compensation of  $89,116, which is included within the $266,754
expense above.

Pro forma information regarding net income and earnings per share
as required by FAS 123 has been determined as if the Company has
accounted for its employee stock options and warrants granted
subsequent to December 31, 1994 under the fair value method of
that Statement. The fair value for these options and warrants
was estimated at the date of grant using a Black-Scholes option
pricing model with the following weighted-average assumptions for
1997 and 1996, respectively; risk-free interest rates of  6.63%
and 6.25; no dividends; volatility factors of the expected market
price of the Company's common stock of 0.443 and 0.398 and a
weighted-average expected life of the option of five years for
both periods.

<PAGE> F-14

8. Shareholders' Equity (continued)

The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options which have no vesting
restrictions and are fully transferable. In addition, option
valuations models require the input of highly subjective
assumptions including the expected stock price volatility.
Because the Company's employee stock options and warrants have
characteristics significantly different from those of traded
options and warrants, and because changes in the subjective input
assumptions can materially effect the fair value estimate, in
management's opinion, the existing models do not necessarily
provide a reliable single measure of the fair value of its
employee stock options and warrants.

For purposes of pro forma disclosures, the estimated fair value
of the options and warrants is amortized to expense over the
option and warrant's vesting period. The Company's pro forma
information follows:

<TABLE>
<CAPTION>
                              1997           1996
<S>                        <C>             <C>                                      
Pro forma net income        $777,288        $34,826
Pro forma net income 
 per share                     $0.12          $0.01
</TABLE>

The following table reflects activity within the SIP for the
years noted:
<TABLE>
<CAPTION>
                                  1997                     1996
                                  ----                     ----
                                      Weighted                 Weighted
                           Options     Average      Options     Average
                               and    Exercise          and    Exercise
                          Warrants       Price     Warrants       Price
                        ----------   ---------    ---------   ---------
<S>                     <C>             <C>      <C>             <C>
Outstanding-beginning                                            
  of year                1,438,071       $1.68      396,700       $0.93
Granted                    144,000       $1.93    1,101,571       $1.89
Exercised                  (50,000)      $0.56      (39,800)      $0.88
Canceled/expired           (90,071)      $1.91      (20,400)      $1.21
                                                              
Outstanding- end of    
 year                    1,442,000       $1.71    1,438,071       $1.68
                                                              
Exercisable at end  
 of year                 1,242,200       $1.72    1,348,382       $1.71
Weighted-average                                               
fair value of                                                 
options granted
during the year                          $0.89                    $1.18

</TABLE>

<PAGE> F-15

11. Commitments

The Company leases its corporate office and sales offices under
operating lease agreements expiring prior to March 31, 2000 which
provide for annual minimum rental payments as follows:


     Year ending March 31                         
                                                  
     1998                                         $134,566
     1999                                          103,225
     2000                                           37,323
                                                 ----------
                                                  $275,114
                                                 ==========

Rent expense for the years ended March 31, 1997 and 1996 was
$131,934 and $106,575, respectively.

12. Segmented Information

Substantially all of the Company's operations are in the United
States. The industry segments are as follows:

<TABLE>
<CAPTION>
                                          Computer            
                                         Application
                             General      Software
                           Financing     and Support     Corporate         Total
                          -------------------------------------------------------
   <S>                   <C>              <C>            <C>         <C> 
    1997                                              
    Revenue               $5,749,110       $460,019       $      -    $6,209,129
    Operating (loss)       
     profit                1,314,943        (11,665)       (13,748)    1,289,530
    Identifiable assets   26,846,877        171,588          2,277    27,020,742
    Capital expenditures      84,820              -              -        84,820
    Depreciation and        
     amortization             55,975         29,452              -        85,427
                                                            
    1996                                               
    Revenue                 $5,267,530     $565,465       $      -    $5,833,175
    Operating (loss)  
     profit                  1,088,188      (20,298)        (8,989)    1,058,901
    Identifiable assets     19,626,132      174,645          1,024    19,801,801
    Capital expenditures        67,377            -              -        67,377
    Depreciation and 
     amortization               42,456       44,208              -        86,664

</TABLE>